Super Micro Computer stock price continued its recovery and hit the crucial resistance at $60, its highest level since February 20th and a few points below $62.15. SMCI has jumped by 250% from its lowest point in November last year.
SMCI stock price analysis
The daily chart shows that the SMCI stock price bottomed at $17.5 in November last year and then rebounded to $60. It has moved above the ascending trendline that connects the lowest levels in November, March, and May.
SMCI has formed a golden cross pattern as the 50-day and 200-day Exponential Moving Averages (EMA) have crossed each other. This cross is one of the most common bullish continuation signs in technical analysis.
The stock is also nearing the key resistance at $62.15, the upper side of the ascending triangle pattern, a common continuation sign in technical analysis.
SMCI has moved above the 38.2% Fibonacci Retracement level, while the Supertrend indicator has turned green. Therefore, technical analysis points to more upside.
The price target in an ascending triangle is established by measuring the height at the widest point, and then the same distance from its upper side. In this case, the height of this triangle is about 72%. Measuring the same distance gives it a target price of $107, much higher than the current $60.
Read more: Here’s why SMCI stock price may surge despite facing headwinds
Super Micro Computer earnings ahead
The main reason for the ongoing SMCI stock surge is the view that the AI industry is booming. For example, Taiwan Semiconductor published strong financial results, pushing its market capitalization to over $1.2 trillion. This is notable since TSMC is the biggest manufacturer of semiconductors globally.
The next important catalyst for the SMCI stock price is its earnings scheduled for next week. Analysts expect its numbers to show that its revenue rose by 11.4% in the quarter to $5.9 billion, a notabe figure considering it was higher than the $5.2 billion it made in 2021.
Analysts also anticipate that SMCI’s revenue will grow by 10% this quarter to $6.5 billion, while its annual revenue will be $22 billion, followed by $29.7 billion next year. The low single-digit revenue figures show that its business is slowing.
There are signs that Super Micro Computer stock is fairly valued ahead of its earnings. Its forward price-to-earnings ratio of 26 is slightly above the industry median of 24. Similarly, its forward EV to EBITDA of 19 is also slightly high than the sector median.
Still, the Supermicro stock is currently much higher than the average analysts estimate. The current stock of $45 is lower than the estimated $60.
Read more: Top 4 reasons why Supermicro’s bond offering is a positive for SMCI shares
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